IRS investigates LeRoy Butler charity

Nov. 21, 2013

Former Green Bay Packers safety LeRoy Butler talks about his involvement in his charity during an interview last month. / Gary C. Klein/Sheboygan Press Media

LeRoy Butler charities timeline

1999: While still playing for the Packers, LeRoy Butler founds the LeRoy Butler Foundation based in his hometown of Jacksonville, Fla. Its mission: “To assist financially underprivileged children.” The IRS grants it tax-exempt status. 2001:Butler retires. 2002:The foundation files its required annual Form 990 with the IRS, the last time it does so. 2003:Butler says he shut down the foundation around this year, though the IRS was never notified. 2004:The state of Florida dissolves the foundation for failing to file a 2004 annual report (however, the IRS never changed the foundation’s status and as of today still lists it as a valid tax-exempt organization). 2003-present: Butler holds several charity events annually in Wisconsin under the LeRoy Butler Foundation name, purportedly raising money for breast cancer, though no IRS returns are filed until 2012. 2009:Butler founds the LeRoy Butler Scholarship Fund based in Racine and is granted tax-exempt status. Its purpose is to distribute money to women diagnosed with breast cancer and to provide scholarships for their children. 2012:The IRS revokes the scholarship fund’s tax-exempt status for failing to file a 990 for three straight years. 2012:Butler files a Form 990-N for 2011 saying the scholarship fund took in less than $50,000, meaning no more financial details need be reported for that year. 2013:Butler said he has submitted a 2012 Form 990 for the scholarship fund and an application to regain its tax-exempt status, though he has since said he plans to disband the charity. Several former partners report being contacted by federal agents investigating Butler’s charity work. Source: IRS filings, IRS data on Guidestar.org, interviews with Butler, Florida Division of Corporations

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LeRoy Butler’s charity work is under investigation by the IRS, the Gannett Wisconsin Media Investigative Team has confirmed.

The former Green Bay Packers safety has a history of IRS non-compliance and actions that charity watchdogs say raise red flags. An I-Team story published Sunday detailed how Butler has raised money in Wisconsin during the last decade while submitting only one annual filing to the IRS. Butler has also taken appearance fees of up to $10,000 for his own charity events and repeatedly advertised for-profit ventures on his charity website.

A former associate of Butler’s confirmed Wednesday he was interviewed by IRS agents about Butler’s charity, and a Wausau businessman said he also spoke to federal agents on the subject.

Butler referenced an IRS inquiry in a post on his charity’s Facebook page Monday.

“Prior to the publication of that article, my Foundation had been cooperating with the Internal Revenue Service in their review of the Foundation,” the post read in part. “Concurrently, the Foundation was conducting an independent review to determine if it was operating in compliance with federal guidelines.”

Gannett Wisconsin Media conducted more than two hours of interviews with Butler prior to publishing the I-Team story, and he never mentioned an independent review or an IRS investigation. The cell phone Butler used as of late last week is no longer in service, and he did not reply to an email from Gannett Wisconsin Media seeking comment for this story.

An IRS spokesman said the IRS does not comment on specific charities and would not confirm the investigation into Butler. The results of IRS investigations — even those resulting in fines or other punitive action — are not made public.

Sandra Miniutti, a vice president at Charity Navigator, the nation’s largest charity evaluator, said she was surprised but heartened to hear of an IRS inquiry. She said the nonprofit sector is typically not closely policed.

“It is very rare to see the IRS investigating a charity, and it is certainly encouraging that it is taking a closer look at Mr. Butler’s nonprofit activities,” Miniutti said.

Butler, 45, was a four-time All-Pro and played for the Packers from 1990 to 2001, playing a key role in the team that won the 1996 NFL championship. He has maintained a high profile in Wisconsin in the years since, hosting several charity fundraisers annually, speaking at various events, authoring several books and appearing as a Packers commentator.

IRS questions

Craig Kersemeier, president of K-tech Kleening Systems in Weston, said agents with the U.S. Treasury Department contacted him about a month ago to ask questions about his company’s involvement with Butler’s charity. The IRS is part of the Treasury Department.

Kersemeier said his company hosted a fundraising golf tournament with Butler for four or five years. K-tech cut ties with Butler’s foundation several years ago over concerns about how the money was being used.

“We basically set (the tournaments) up. All the funds that were raised went to him. … What he did with it after that point we have no clue,” Kersemeier said. “He gave money to some of the ladies and stuff, but a couple of us guys were just kind of realizing it was kind of like there should be more money coming back to the ladies than what there really is. … I’ve run golf tournaments for the chamber of commerce — I know what kind of money comes through. It was like, there should be more money left, but there wasn’t.”

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Butler founded the LeRoy Butler Foundation in 1999 but the group has not filed with the IRS since 2002, even though he continued raising money under that name through this year. A second charity he started, the LeRoy Butler Scholarship Fund, was founded in 2009 but had its tax-exempt status revoked by the IRS after failing to file returns by 2012. The only return on file from Butler since 2002 is a short-form 2011 filing for the scholarship fund submitted after the revocation.

Kersemeier said he and other organizers asked Butler several years ago about the lack of IRS filings after a sponsor looked up the foundation and noticed nothing had been submitted. When Butler “couldn’t give us straight answers,” K-tech ended the relationship.

Kersemeier said K-tech now runs a golf tournament, the Pink Ribbon Open, through the company’s own nonprofit organization.

A former associate of Butler’s said Wednesday the IRS also contacted him.

Brad Heinkel, station manager at WAOW-TV in Wausau, confirmed in a brief phone interview that the IRS contacted him about his work with Butler’s charity. He declined to say when that occurred or provide other details. Heinkel did say he is no longer affiliated with the LeRoy Butler Foundation.

Heinkel was listed as a representative of Butler’s foundation in media accounts from the mid-2000s, including a 2007 story that directed readers to send checks for Butler’s foundation to Heinkel’s home address. A business card of Heinkel’s from 2010 obtained by Gannett Wisconsin Media listed him as Wausau chapter president of the LeRoy Butler Foundation.

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Heinkel previously worked at WSAW-TV in Wausau, and the station manager there, Al Lancaster, said two IRS agents visited the station July 12 looking for Heinkel.

A message was posted on Butler’s charity website less than a week ago announcing the charity will shut down after a final fundraising cruise in February. Butler said in interviews over the last month that he planned to shut down, but his website did not reflect that at the time.

Butler also responded to the initial story via social media, posting on Twitter, “I am mad cause it makes me look like a money hungry n-word, and that's not fair, so now I will move forward, and still help people.”

Partner cuts ties

Revelations about Butler’s charity work have caused at last one company to abandon a partnership with him. Butler has done book signings at Sendik’s Food Market locations throughout southeastern Wisconsin in recent months, but a company spokesman said Wednesday that Sendik’s has cut ties.

“Sendik’s has had a relationship with LeRoy Butler that has included both a marketing and charitable component,” spokesman Nicholas Bandoch said in an email. “In working with LeRoy over the past few years, we know he has a big heart and wants to help as many people as he can. However, given the questions that have been raised, Sendik’s will take no further action in support of the Leroy Butler Foundation.”

Butler has said all money raised by his charity went to help women diagnosed with breast cancer or their families, though that contradicts his own admission that he took appearance fees from charity events that were profitable.

When asked for records detailing his donations, Butler provided a breakdown by city of 87 women he said received payments of $500 to $1,000 through his foundation from 2004 to 2012. No names were included, which Butler said was due to privacy concerns.

Several women interviewed by Gannett Wisconsin Media have confirmed receiving money from Butler, and one said she received a used car. Contact information for those women was provided by Butler.